Napoleon might have said the first part of the quote when he learned that an English ambassador refused the condition of the Chinese emperor. 200 years later, this sentence is still accurate in the digital economy.
Except despite many signals, we continue to not see it. The main reason, is the tech media world continues to focus on the Silicon Valley, and talk as much about a start up that raised $4M for A round, as for a Chinese company that received $400M as a seed round. Like the myth of the Plato cave, we prefer to focus on our environment and are scared to look outside.
Beyond hardware, beyond China…
However, some signals are strong and visible. As a reminder the biggest IPO in the history of the USA is a Chinese company. Alibaba is already worth $190B. However, it continues to be ignored.
China is already a successful high tech hardware manufacturer. As a reminder Huawei become the number 3 mobile phone manufacturer worldwide this year. Now, Chinese companies are about to dominate the mobile application industry, the social business, and as well as become a global worldwide leader in software and services.
Wechat (one of the Tencent product) has 700M Monthly active users growing by 40% in the last 12 months and twice Twitter. Tencent pass the $200B market cap this month with an increase of 50% in value in 4 months, and 30% increase of revenue on a year over year!
Baidu, a search engine, had a 35% increase in revenue on Y/Y, with a revenue above $10B, 53% of the revenue coming from mobile.
And the list can be long in all the sector of the industry: Forbes was acquired by a Chinese group, LeEco is competiting against Tesla…and so on, and so on.
Inside the anthill
Make no mistake, as well as in US, numerous Chinese private companies continue to grow thanks to massive private equity rounds, with limited visibility in western media.
According to Bloomberg, Beijing Homeling Real Estate (the equivalent of Zillow) is raising $6 Billion, the Chinese ride hailing app, Didi is conducting a round at a value in the $20 to $25B range (vs $62B for Uber.)
Last week, Ant Financial, Financial arms of Alibaba, raised an astonishing $4.5B at a $60B valuation. It was a B round!
Behind this tsunami of investment, is a strong commitment from the Chinese government who decided to invest $338 billions into start up investment funds. It is almost the whole 2015 budget of a country like France.
After the consumer goods, China is taking a staggering lead in software and services in an unprecedented way.
At this pace, it’s almost impossible to overestimate China.